Air Berlin to Shut Down Operations Amid Rising Concerns Over Europe's Airline Failures

Air Berlin, Germany’s second largest but long troubled carrier, will close its doors at the end of this month, the company said in a notice posted on its website.

The announcement came as no surprise to industry watchers; the airline declared bankruptcy two months ago after one of its major stakeholders, Etihad Airways, said it would stop subsidizing the airline.

Air Berlin flies to eight cities in the U.S.: New York, Boston, Orlando, Miami, Chicago, Los Angeles, San Francisco and Fort Myers, Fla. The notice left open the possibility that the airline could continue to offer some services; the carrier said it can continue to sell tickets for upcoming flights, but does not guarantee services for after Nov. 1. Lufthansa and Easy Jet are said to be considering picking up some assets from Air Berlin. And the insolvency doesn’t affect Niki, the carrier’s low-fare partner.

It’s unclear how many passengers are affected; the carrier said that it will refund any ticket that was issued after Aug. 15, the date it declared bankruptcy. But if other airlines acquire pieces of the carrier, it’s possible they will step in to continue flights. The full FAQ is available on the Air Berlin website.

The German carrier thus becomes the latest failure among Europe’s traditional airlines; Alitalia is also on life support. Etihad also had a stake in the Italian flag carrier, but that Middle East airline has apparently grown tired of playing the role of White Knight.

Meanwhile, many observers are expressing alarm over the turmoil in Europe’s aviation business. Recently, Ryanair, once mentioned as a possible suitor for Air Berlin, has had to cancel scores of flights due to a pilot shortage, as fast-growing rivals like Norwegian have poached its employees.

And the demise of Monarch Airlines, a U.K. discount line known for operating cheap charters to vacation hotspots, has prompted a call for government action from the Association of British Travel Agents (ABTA). At a meeting this week, the ABTA said the government should impose a tax on UK flights to pay for any measures to help stranded passengers in the event of future insolvencies.